Under current pandemic conditions, a Huwan wet market must install a new pangolin disinfector, and has to choose from two made-in-Mamoral brands with different initial and operating costs. The dispenser in cach option needs replacing at regular intervals. Huwan demands a 9% annual interest rate to analyse such investments. Determine the capitalised cost (i.e. the present cost of purchase, operation and replacement in perpetuity) using the information in the table. Disinfector 1 Disinfector 2 Disinfector purchase cost, $ 350 210 Dispenser cost, $ 35 84 Annual operating costs, $ 35 56 Dispenser life, years Disinfector service life, years 12 12 Salvage value, $ 35 35 4.
Under current pandemic conditions, a Huwan wet market must install a new pangolin disinfector, and has to choose from two made-in-Mamoral brands with different initial and operating costs. The dispenser in cach option needs replacing at regular intervals. Huwan demands a 9% annual interest rate to analyse such investments. Determine the capitalised cost (i.e. the present cost of purchase, operation and replacement in perpetuity) using the information in the table. Disinfector 1 Disinfector 2 Disinfector purchase cost, $ 350 210 Dispenser cost, $ 35 84 Annual operating costs, $ 35 56 Dispenser life, years Disinfector service life, years 12 12 Salvage value, $ 35 35 4.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Under current pandemic conditions, a Huwan wet market must install a new pangolin disinfector, and has to
choose from two made-in-Mamoral brands with different initial and operating costs. The dispenser in each
option needs replacing at regular intervals. Huwan demands a 9% annual interest rate to analyse such
investments. Determine the capitalised cost (i.e. the present cost of purchase, operation and replacement in
perpetuity) using the information in the table.
Disinfector 1 Disinfector 2
Disinfector purchase cost, $ 350
210
Dispenser cost, $
35
84
Annual operating costs, $
35
56
Dispenser life, years
3
4
Disinfector service life, years 12
12
Salvage value, $
35
35
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